Premium carmakers defy chip crisis with robust profits
Daimler, Porsche and Audi report strong earnings despite hit to deliveries from semiconductor shortage
Mercedes-Benz owner Daimler defied the semiconductor crisis to increase earnings by a fifth in its latest quarter, despite delivering almost 145,000 fewer vehicles than it did in the pandemic-ridden months last year.
The Stuttgart-based company had prioritised more profitable models, chief financial officer Harald Wilhelm said, helping it to report just under €2.6bn in net profit for the three months to the end of September, compared with almost €2.2bn in the same period in 2020.
“Despite considerably lower production and sales . . . we significantly improved our top line quality at Mercedes-Benz cars and vans with better product mix and optimised pricing,” Wilhelm told analysts on Friday.
In particular, Mercedes was selling more of its luxury S-Class model, as well as high-margin GLA and GLE SUVs, he said.
Other high-end German carmakers also reported encouraging numbers on Friday in the face of persistent headwinds.
Porsche, which belongs to the VW Group, said it had exceeded its profit margin target of 15 per cent so far this year, despite a backlog of 10,000 orders for its flagship electric Taycan model because of the shortage of crucial chips and components.
VW’s premium brand Audi, meanwhile, which delivered almost 24 per cent fewer cars in the last quarter in comparison with last year, also raised its revenue and profit guidance for the year, although operating profits fell to €740m, from €864m, in the three months to the end of September.
“Thanks to a strong operating performance, a favourable price position, and continuation of cost discipline, it was possible to largely compensate for volume lost because of the semiconductor crisis,” the Bavarian marque said.
But Porsche’s chief financial officer Lutz Meschke warned that “the fourth quarter will be a challenge”, saying the company would have to be in “absolute task force mode” to maintain its profit target over the next few months.
The premium and luxury carmakers’ relatively rosy results sharply contrast with losses endured by other mass-market manufacturers in recent months.
GM said this week its quarterly adjusted earnings before interest and tax had fallen by 45 per cent, while Ford’s were down by 17 per cent.
The mass-market Volkswagen brand, whose deliveries dropped by a more than a quarter between July and September, posted an operating loss of 184m, down from a 522m operating profit last year.
Separately on Friday, German supplier Bosch said it would invest a further €400m in expanding semiconductor plants in Europe and Malaysia to meet surging demand.